EigenLayer has assured its community that its platform remains secure, despite an investor losing $5.5 million worth of EIGEN tokens in a recent email breach.
This incident coincided with ongoing criticism of EigenLayer’s transparency regarding token staking and followed the listing of its tokens on major exchanges.
EigenLayer Faces Scrutiny Over $5.5 Million EIGEN Token Theft
On October 4, Ethereum’s restaking protocol, EigenLayer, revealed that an investor’s email thread was compromised by a malicious actor. This led to the theft of 1,673,645 EIGEN tokens, valued at approximately $5.5 million.
EigenLayer explained that the attacker intercepted the email communication, leading the investor to send the tokens to the wrong address. The stolen tokens were quickly sold on a decentralized exchange, converted into stablecoins, and transferred to centralized exchanges to obscure the trail.
Read more: What Is EigenLayer?
EigenLayer has collaborated with various exchanges and law enforcement agencies. It added that it has successfully frozen a portion of the stolen funds. The restaking platform further clarified that the breach stemmed solely from compromised email communication and was unrelated to the platform’s smart contract or protocol security.
“The compromise has not impacted the broader ecosystem. There is no known vulnerability in the protocol or token contracts and this compromise was not related to any onchain functionality. We continue to investigate the situation and will be posting further information once we have it,” EigenLayer stated
The team has since bolstered its security measures, particularly regarding communication with investors while reaffirming that the platform remains secure overall.
Yet, the incident has drawn attention to the platform’s token lockup policies. Observers noted that EigenLayer did not employ the typical one-year lockup period often seen with token issuers. This raises concerns about potential unauthorized transactions from large token holders.
EigenLayer’s policy currently restricts early investors and team members from selling or staking EIGEN tokens until September 2025. Tokens will unlock gradually at a rate of 4% per month until September 2027. However, recent token movements have led some to question the effectiveness of these restrictions.
Read more: How to Participate in an EigenLayer Airdrop: A Step-by-Step Guide
EigenLayer is one of the top three DeFi platforms, with over $10 billion in total value locked (TVL). Following its token’s October 1 release, EIGEN briefly entered the top 100 tokens by market capitalization with a fully diluted valuation of over $7 billion.
The post EigenLayer Reassures Platform Security After $5.5 Million Token Theft appeared first on BeInCrypto.
